| We want to be among the 5 top banks
in Nigeria – Francis Atuche,MD, Bank PHB
By SEUN ADESIDA
Monday, April 9, 2007
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•Atuche
Photo: Sun News Publishing |
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Cars will run on water is no more an idea to BankPHB, but
the bank is ready to make it a reality for its customers.
This was the position of the bank’s Managing Director,
Francis Atuche in this chat with Daily Sun.
According to Atuche, “what we are saying as a bank,
is that when a customer has an aspiration, a dream, a project,
but does not know how or where to go to get banking support,
that we will support the customer.
“At Bank PHB, we say our goal is to satisfy the customer’s
ambition, so that those aspirations can turn from dream to
reality and that is what we stand for”. Atuche said
the steep reduction in the number of banks did not necessarily
result in increased earning opportunities, just as liquidity
surfeit in the banking sector resulted in a downward pressure
on interest rates and the shrinking in interest margins.
BankPHB
It all formally began on October 22, 2005, when the former
Platinum Bank Plc and former Habib Nigeria Bank Limited signed
an agreement to merge their businesses and coalesce into a
formidable institution that will be in the forefront of banking
post consolidation. The strategic intent then, and now is
to build a national and diversified franchise by creating
superior value for stakeholders through an unmatched superior
customer service experience. Since merging our two banks in
2005, we have faced and risen to many challenges.
Banking sector
The reforms in the banking sector have resulted in the restoration
of confidence in the system, as 25 banks scaled through the
consolidation hurdle. The steep reduction in the number of
banks did not necessarily result in increased earning opportunities.
Liquidity surfeits in the banking sector resulted in downward
pressure on interest rates and shrinking interest margins.
This was compounded by reduced dependence on the banking sector
for public sector borrowing thus resulting in a steep drop
in interest rates on government instruments, a risk free investment
outlet for bank funds. In addition, competition amongst banks
for greater market share has become stiffer, thereby also
placing pressure on the fee-based income. In the midst of
this, inflation remained at double digits further eroding
bank earnings.
Partnership with Fortis
There is a different type of partnership. Some partnerships
are just for co-managing the foreign reserve, and others allow
you to learn some technical and service offering issue from
the partner. Between us and Fortis Investment, we are about
opening our asset management company in Nigeria; it is going
to be a joint venture in Nigeria. We have visited Fortis in
the UK and they are training some of our staff for six months
on their own expense. They will come back to manage the asset
management company we are about floating.
They have helped us to support our retail business strategy.
We have meet with their retail team in Brussels and they will
be coming to Nigeria towards the end of March and early April,
to create a world class treasury for us. So, it is not just
a partnership just for managing foreign reserve. It is an
all-encompassing partnership and we are sharing knowledge.
Fortunately, they have partnership in other parts of the world,
like in Russia, and they are very eager to see the benefit
that will accrue to this partnership, with view to target
the west coast of Africa.
We are already thinking about raising our capital base to
the new strategic level to be able to enjoy further patronage
and higher level of foreign reserve management.
Retail banking
Consistent with our vision to be a leading financial
institution, we have evolved a retail banking strategy that
will enable us to provide superior service to the different
categories of individuals that constitute this market-high
net-worth individuals and the mass market.
Through our innovative approach to retail banking, individual
customers across the country will have access to our expanding
branches and other distribution channels spread all over the
country.
Our retail banking services include savings and checking accounts,
mortgages, personal loans, debit cards, and e-banking services.
We have already adopted an integrated multi-channel strategy
to ensure that customers’ needs and expectation are
met, even as we re-position our branches as convenient stores.
To ensure we actualise our retail banking goals, we have commenced
the roll-out of our innovative products and building of an
excellent sales force to drive customer acquisition.
The products include Platinum World Account, our hybrid account
that is not only COT free but also pays interest; Presto,
our Local Money Transfer Service; Partner Account, account
holders not only earn bonus interests for introducing customers
to Bank PHB but also get paid high interest on their deposit;
Phuture Account, a savings account for kids and teenagers;
Easy Life Scheme, which offers credit facilities to individuals
with stable and sustainable source of income to enable them
part-finance the acquisition of assets for personal use; Paytime,
offers credit facilities to salary earners in form of a bridging
finance to meet personal soft needs; plus an array of e-banking
products, namely Bank PHB Debit Card, Internet banking, SMS
banking and e-statements.
As a customer-centric bank, we are, through our retail banking,
responding to the changing needs of our customers by providing
them with exceptional customer service, thereby building a
base of committed and loyal customers.
Institutional banking
The competitive landscape of the Nigerian banking industry
post-consolidation is hinged on the ability of surviving players
to constantly create distinctive value for their customers.
We recognise that one of the challenges for banks in the new
dispensation will not be mainly that of deposit mobilisation,
but the effective and efficient utilisation of shareholders’
funds in the delivery of value to customers on one hand and
the enhancement of the bank’s yield on investment on
the other.
Drawing from the bank’s vision, institutional bank service
specifically to provide high standards of banking service
to middle-tier and top-end multinationals and large local
conglomerates became paramount.
It is on this premise that we have realigned our business
to ensure that effective business strategies supported by
well articulated and functional structures are put in place,
whilst the required skills are employed to drive this strategy,
which includes partnering with the real sector particularly
industrial sectors such as manufacturing, oil and gas, telecommunications,
power, construction, maritime, logistics and transportation,
hospitality and the public sector; engaging in transactions
with minimal and well mitigated risks, to partner with local
and global multilateral agencies, financial institutions as
well as specialised financial institutions in financing developmental
projects in the industrial sector.
Investment banking
Our investment bank services cover corporate restructuring,
consolidations, cross-border transactions, foreign capital
inflows, venture capital, privatisations and more efficient
management of liquidity and business. As a major player in
the nation’s reformed banking sector, we deploy our
resources – human and material, global network of alliances,
and relationships to bring value to customers’ operations,
which enables them to achieve their goals, and meet obligations
to their various stakeholders through our products and services.
Commercial banking
At our bank, commercial banking business, which is designed
to deliver superior performance on an excellent customer service
platform is deep, broad and made up of businesses that are
largely unstructured but with significant turnover. To achieve
a sharper and more focused reach on existing and potential
clientele. Our commercial banking activities are segmented
to uniquely provide customised services to different segments,
commercial business, and small business.
Government policy
Government’s sustained fiscal discipline has significantly
led to the unprecedented growth of the nation’s foreign
reserves. In 2006, the Federal Government attained a significant
milestone in resolving the country’s huge debt burden.
The restructuring of the over $30 billion debt led to the
cancellation of about $18 billion. These reforms led to Nigeria’s
rating by internationally acclaimed credit rating agencies
– Fitch and Standard and Poor’s. The BB-rating
of Nigeria places the economy on the same growth pedestal
with countries like Indonesia and Brazil.
However, cost of doing business in Nigeria has not significantly
reduced due to poor infrastructure and inadequate security.
Efforts to liberalise power generation through Power Holding
Company of Nigeria (PHCN), are still at the teething stages
and are yet to impact significantly on power supply in the
country. Insecurity of lives and property due to increasing
wave of crime has also significantly affected the inflow of
business.
On the political scene, the conduct of elections in 2007 must
be done in a way as to restore confidence in the survival
of Nigeria’s democracy and significantly allay the fears
of local and foreign investors and the business community
in general.
Challenges
The first has been to physically merge our organisations together,
and the second has been to develop our identity, a banner
under which we can all rally, symbol that we can proudly offer
to our clients, existing as well as new. Before any re-branding
work commenced, we undertook the development of brand platform.
This platform formed the foil, against which all branding
decisions have been made, and against which all communication
decisions will be made in the future.
Overcoming challenges
Within the first quarter of our merger, we surmounted the
challenges of integrating people and processes and forging
a common front for the daunting challenges in the banking
industry. I still remember with nostalgia March 1, 2006, when
the bank unveiled its brand to the Nigerian public. Since
that historic day, you will agree with me, that the Bank PHB
brand has not only become easily recognisable in the Nigerian
financial landscape, but also the benchmark for corporate
branding in the country.
Performance
Despite the macro-economic challenges, the bank recorded significant
growth in all the vital financial indices, a clear indication
that the bank is firmly positioned on the path to becoming
one of the top five players in the Nigerian financial landscape.
Gross earnings in the period rose by 99 per cent from N6.62
billion in 2005 to N13.28 billion in 2006. Profit before tax
was an impressive N3.5 billion, representing a significant
increase of 233 per cent over the N1.05 billion pre-merger
profit in 2005.
Profit after tax was N2.45 billion, 248 per cent higher than
the N703 million in the corresponding period last year. The
growth in earnings was fuelled by more than a doubling in
the bank’s core business as interest income hit an all
time high of N8.28 billion, while non-interest income rose
by an impressive 128 per cent to about N5.0 billion, indicating
a strategic spread and sustainability of the bank’s
earnings. In line with our commitment to deliver premium shareholder
value on a consistent basis, the board proposed a dividend
of N1.25 billion.
Our balance sheet size, including contingents closed at an
impressive N188 billion in 2006, 230 per cent higher than
N60 billion in 2005. It is worthy to note that the key drivers
in the growth of our balance sheet size are in vital areas
such as deposits, which increased steeply to N109 billion,
an impressive increase of 395 per cent.
Strategic initiatives
In order to ensure that our impressive earnings in the first
year of merger are not only sustained but surpassed in the
future, the bank took several strategic initiatives to increase
its’ earning and profit capacity. In order not to miss
out in the potential opportunities in managing Nigeria’s
burgeoning external reserves as well as position itself to
become a major player in the international financial markets,
we partnered with Fortis Investments, a subsidiary of Fortis
Group, one of Europe’s leading banks.
As such, much of the corporate agenda setting decisions that
had to be made at this early crucial stage were based solely
on conviction, rather than compromise because there was always
only one point of view to consider on every issue; the best
point of view. Bank PHB today typifies a well-crafted high
performance business machine that ensued from the combination
of the former Platinum and Habib banks, devoid of legacy problems
of the antecedent institutions and fully endowed with their
best attributes.
Investing in promotions
It is a two-prong approach; one approach is for the customers,
to create awareness for the customers and the banking public.
This is because some people do not know, that it is possible
to have a bank account, they have never been to a banking
environment. Their thinking is that before you can have a
bank account you must probably be a big man.
The other side is a reward system for our customers to be
able to feel the bank as theirs. During the last Pot of Phortune
promo, many people won N1million and we saw the gratitude
and the positive shock that it is real and possible. So, the
bank build the trust in the minds of the banking public, when
we make a promise we deliver on it, it is to bring an opportunity
for the customers and the banking public to start a banking
relationship thereby creating or stimulating the saving culture.
Promotion accounts
The first thing is for the accounts to come in, the next thing
is for the bank to give meaning to the account holders that
we are an institution they will like to remain with. If we
don’t give them that meaning, if they don’t see
that opportunity, if they don’t see the benefit accruing
to them for owning a bank account. The account will go as
soon as it came in, so it is our responsibility to ensure
the customer sees the greater part of the message is to keep
the account even after the promo.
Market networking
This is a new initiative to capitalize on the marketing skills
of the customer with a reward attached to it. The reward system
is a part of our reward system to transform the ideas we have
been selling to the banking publics over the past one year,
"ideas likes cars can go on water." Now this is
all about making it happen, your dream will be supported by
the bank, you want to be a millionaire just introduce two
customers to the bank and you are on your way to be a millionaire.
It is not for me to project the success or otherwise of every
product marketing technique, this is more so because the analysis
has been done and it is a scenario planning situation, it
is either A, B, C or a combination of the trio. The fact remains
that many customers will come in as regards the 2 for 1 promo.
In the process, we will be able to support a lot of customers
and their myriad of ambitions. Ambitions that they have given
up, that they will get a bank to support them. We are not
only asking the customer to come and put money in the bank,
we are prepared to support individual financial aspirations.
Bank PHB edge
We are differentiated by the unique customer centric services
we provide, we think first about the customer and then how
our processes and services can support a particular customer.
This is by going back to the customer to find out, what they
want. So, we have a process dedicated to customer survey,
this is done every three months to know what the customer
wants and in the customer’s world. Network marketing,
was a product of such surveys.
Ranking Bank PHB
We are the successful bank; I do not run the ego trip of saying
am top in market capitalisation or top in terms of deposit.
We are building an institution, we believe that banking is
a long distance race and we are preparing ourselves for the
long haul. It is not a hundred metre dash, we are here for
the long haul and we believe that with time, all the efforts
that we put in today, will become manifest to the banking
public.
Iconic brand
We have a brand and an institution that will outlive us, a
place where some of the brightest minds over generations will
give expression to their genius, an institution that will
play a critical role in the lives of millions of Nigerians.
Inspired brilliance
At the core of our brand platform is our essence, ‘inspired
brilliance’. This is a powerful claim and places an
obligation to all in the bank to live up to it. It refers
simply to what we do and how we do it. This will be the measure
of our efforts and the touchstone for all that we do. ‘inspired
brilliance’ is supported by our four key brand drivers;
standing, channel (accessibility), product (appropriateness)
and experience. The drivers of our brand are basically a set
values and characteristics which describe the nuances of our
brand personality. They influence every communication our
bank produces – and ultimately gives us guidance for
the manner in which we conduct business. Broadly speaking,
the brand platform will guide the way we look and the way
we behave.
Vision
We are inspired by our vision to be the leading financial
services institution, offering platinum grade products, service
and promise. Our customers come first and we must make them
feel it. Bank PHB in 2006 became the first corporate body
in Africa to clinch an exclusive partnership with the World
Business Forum (WBF), the single biggest gathering of the
world’s most influential business leaders and outstanding
thinkers. The forum, which took place from September 12 to
13 had in attendance some of the world’s greatest minds
in business and politics.
Former US President Bill Clinton, Jack Welch and Colin Powell
were just a few of the headliners that spoke to an audience
of more than 4,000 corporate executives gathered at the Radio
City Music Hall in New York for the prestigious event. Under
the strategic partnership, Bank PHB served as the registration
and payment centre for participants from Nigeria to the WBF.
The bank was also given an exclusive right to feature at an
international exhibition at the conference venue, the only
corporate institution from Nigeria and Africa to be given
such right.
Leadership and developmental values
We identify with leadership and developmental values of the
WBF. It also fits into our aspiration and commitment to grow
leaders, both within our organisation and country at large."
In a letter of commendation sent to Bank PHB ahead of the
event, Michael Aaron, vice president HSM group, organisers
of the event, praised Bank PHB for their discerning partnership
with leadership and intellectual development of the highest
order.
The WBF provided a unique opportunity for Bank PHB to profit
from and understand the new geopolitical and global business
landscape and an insight on the most relevant and modern business
challenges, corporate leadership, globalisation and business
strategy.
Merger
When the management of the former Platinum Bank Plc and Habib
Bank (Nigeria) Plc announced its consummation of a merger,
many may have viewed this as a marriage of two strange bedfellows
with seemingly different approaches to conducting banking
business. Unknown to these sceptics, these differences were
in fact, the attraction in our bid to emerge with a truly
national banking franchise that will redefine standards in
the industry. Rather than yield needless duplications, ours
is a profitable symbiosis that can only continually increase
shareholder value. Our foresight is typical of our brand positioning
– a bank that sees beyond the preset and proactively
positions itself for the challenges of the future.
Secret
As in every business situation, underlying our outstanding
accomplishments are great people who worked assiduously to
make the difference. We are fortunate to have a great team
that works with the principle "if someone else has done
this, then we can do it better." This fundamental competitive
philosophy underlie everything we have achieved to date including
the continuing advancement of our market position and sustained
growth in market value.
Like other 24 banking institutions that survived the consolidation
exercise, Bank PHB has a ticket to participate in the marathon
race that banking has more or less become in Nigeria today.
But our aspiration is very obvious, we clearly don’t
want to be an also ran. We are determined to be one of the
top 5 financial institutions in Nigeria by 2010. This implies
that we would be one of the five most preferred banks for
the Nigerian banking public with whom they can entrust a considerable
share of their wallet.
This would never happen by sitting down and talking about
it, we are taking concrete steps to be one of the best financial
institutions to bank within Nigeria.
Talent pool
The bank has continued to enrich its talent pool by ensuring
that every additional person engaged improves rather than
dilute average competence in the system. A number of strategic
recruitment have been effected to drive some pivotal changes
in the system. We remain committed to the dogged and systematic
execution of our corporate, business and functional strategies
as contained in our game book.
Business models
In pursuance of the strategic goal to deliver world-class
solutions to the broad spectrum of our customers, we have
entered a strategic partnership with a leading Indian financial
powerhouse to facilitate transfer of knowledge, systems, people
and business models across both institutions to create balance,
innovation and accelerated momentum across our businesses.
In addition, the bank has also partnered with global asset
managers; Fortis Investments for the management of the nation’s
external reserves and collaboration across our various business
sectors to enable our esteemed customers partake in the benefits
of a flattening global financial marketplace.
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